People v. Ayers

• Decision Date: 09 July 1981
• Citation: 440 N.Y.S.2d 1019,109 Misc.2d 870
• Parties: PEOPLE of the State of New York v. William J. AYERS, Defendant.
• Court: New York County Court

Page 1019

440 N.Y.S.2d 1019

109 Misc.2d 870

PEOPLE of the State of New York v. William J. AYERS, Defendant.

Nassau County Court.

July 9, 1981.

Denis Dillon, Dist. Atty., Nassau County, Mineola, for plaintiff.

Delligatti & Henderson, Mineola, for defendant.

JAN H. PLUMADORE, Judge.

By Order to Show Cause dated May 30, 1981, the defendant has moved, through his attorney, for an Order "... dismissing the indictment herein on the grounds that the prosecution of the defendant on the charge of Criminal Usury in the Second Degree (PL 190.40) is violative of his Constitutional Rights ... in that the defendant by being prosecuted on this indictment is being denied equal protection of the laws ... and is being deprived of liberty without due process of law ..." (CPL 210.20(1)(h)).

The defendant is accused of making a $3,500.00 loan to one Floyd Bilbrey at an interest rate of approximately two hundred eight (208%) percent per annum. The thrust of his "equal protection" argument is that, with the passage in 1980 of General Obligations Law 5-501(6)(b) (which allows for an interest rate in excess of twenty-five (25%) percent on loans greater than $2.5 million), Penal Law Sect. 190.40 now arbitrarily and capriciously discriminates against him since he "cannot make a loan for an amount in excess of $2,500,000.00 ...;" and that, in light of present economic conditions, there is no "correlation" between those laws (PL 190.40; Gen.Oblig.Law 5-501(6)(b)) and the protection of the public good." With respect to "due process", the defendant argues that, with the increase in the interest rates since PL 190.40 was enacted in 1967, "... any possible connection between the 1967 Criminal Usury Law and the promotion of the public welfare has become obsolete ..." and "... the twenty-five (25%) percent per annum interest ceiling is now arbitrary and capricious ..."

The defendant's motion is in all respects denied.

First, there is a "strong presumption" that a statute duly enacted by the Legislature is constitutional. (People v. Pagnotta, 25 N.Y.2d 333, 337, 305 N.Y.S.2d 484, 253 N.E.2d 202. See also Matter of Quinton A., 49 N.Y.2d 328, 336, 425 N.Y.S.2d 788, 402 N.E.2d 126; People v. Davis, 43 N.Y.2d 17, 30, 400 N.Y.S.2d 735, 371 N.E.2d 456; Montgomery v. Daniels, 38 N.Y.2d 41, 54, 378 N.Y.S.2d 1, 340 N.E.2d 444; People v. Broadie, 37 N.Y.2d 100, 117, 371 N.Y.S.2d 471, 332 N.E.2d 338; Matter of Taylor v. Sise, 33 N.Y.2d 357, 364, 352 N.Y.S.2d 924, 308 N.E.2d 442; Matter of Van Berkel v. Power, 16 N.Y.2d 37, 40, 261 N.Y.S.2d 876, 209 N.E.2d 539). In order to declare a statute unconstitutional, the invalidity of the law "must be demonstrated beyond a reasonable doubt." (Emphasis supplied). (People v. Pagnotta, supra at page 337, 305 N.Y.S.2d 484, 253 N.E.2d 202; Matter of Van Berkel v. Powers, supra at page 40, 261 N.Y.S.2d 876, 209 N.E.2d 539). Furthermore, a statute should not ordinarily be set aside as unconstitutional by a court of original jurisdiction "unless such conclusion is inescapable." (People v. Smith, 88 Misc.2d 590, 597, 388 N.Y.S.2d 221, citing People v. Tabb, 80 Misc.2d 431, 364 N.Y.S.2d 357; People v. Estrada, 80 Misc.2d 608, 364 N.Y.S.2d 332; People v. Webb, 78 Misc.2d 253, 356 N.Y.S.2d 494. See also People v. Riley, NCC, 8/12/74, Baker, J., at page 3). Finally, the strong presumption of constitutionality includes "a very strong presumption" that the Legislature has investigated and found the existence of a situation indicating "the need for or desirability of the legislation." (Montgomery v. Daniels, supra at page 54, 378 N.Y.S.2d 1, 340 N.E.2d 444 and the cases cited therein. See also Matter of Quinton A., supra at page 336). Thus, the showing of unconstitutionality "beyond a reasonable doubt" may not be aided by the Court substituting its own judgment for that of the legislature "as to the wisdom and expediency of the legislation." (People v. Davis, supra at page 30, 400 N.Y.S.2d 735, 371 N.E.2d 456). Given all of that, it is this Court's conclusion that the defendant has failed to meet his burden of demonstrating the unconstitutionality of Penal Law § 190.40 beyond a reasonable doubt. The strong presumption of validity intact, the defendant's motion is denied.

Assuming arguendo the presumption is inappropriate for present purposes, the defendant's arguments still fail on the merits.

With respect to the "equal protection" argument, the Court of Appeals has recently restated the tests to be applied by the Courts of this State in evaluating a claim of denial of equal protection of the laws. In People v. Whidden, 51 N.Y.2d 457, at page 460, 434 N.Y.S.2d 937, 415 N.E.2d 927, the Court (per Wachtler, J.) stated:

"In evaluating whether a statute violates the equal protection clause a court normally applies a 'rational basis' test to determine whether the varied treatment of separate classifications of citizens 'rests on grounds wholly irrelevant to the achievement of the State's objective' (McGowan v. Maryland, 366 U.S. 420, 425 Where a statute's application differentiates on the basis of race, alienage or nationality, however, the classification is deemed suspect and a strict scrutiny test must be applied to determine whether the challenged law is 'necessary to promote a compelling governmental interest' (Shapiro v. Thompson, 394 U.S. 618, 634 [89 S.Ct. 1322, 1331, 22 L.Ed.2d 600]).

"Between those two tests, a third has developed to evaluate a constitutional challenge to a gender-based statute which 'must serve important governmental objectives and must be substantially related to achievement of those objectives' (Craig v. Boren, 429 U.S. 190, 197 see Califano v. Webster, 430 U.S. 313, 316-317 [97 S.Ct. 1192, 1194, 51 L.Ed.2d 360])."

The first test, the "rational basis" test, is clearly the focal point of this Court's inquiry here.

The stated purpose for the Legislature's enactment of PL § 190.40 (and Gen.Oblig.Law § 5-501) was to tighten the laws against "loansharking" and to provide law enforcement with an effective weapon against "organized or systematic loansharking." v. Hartmann & Sons, 51 Misc.2d 393, 395, 273 N.Y.S.2d 295. (See also Schylander v. Tsaruchas, 96 Misc.2d 934, 935, 409 N.Y.S.2d 932)]. As the Court of Appeals stated it, the "purpose of Usury Laws, from time immemorial, has been to protect desperately poor people from the consequences of their own desperation." (Schneider v. Phelps, 41 N.Y.2d 238, 243, 391 N.Y.S.2d 568, 359 N.E.2d 1361. See also Universal Credit Co. v. Lowell, 166 Misc. 15, 2 N.Y.S.2d 743). The legislation was never intended to affect the conduct of legitimate money lending businesses. (Memorandum of State Executive Department, McKinney's 1980 Session Laws of New York, p. 1766. Cf. Flushing Nat'l Bank v. Pinetop Bldg. Corp., 54 A.D.2d 555, 387 N.Y.S.2d 8 and the cases cited therein).

The purpose for the Legislature's enactment in 1980 of a new section to be added to the General Obligations Law, Section 5-501, was the maintenance of New York's position as a financial center, and the preservation and expansion of the finance industry in the State in view of the "unprecedented credit conditions in this country, resulting in part from actions taken by the Federal Government." (Memorandum of State Executive Department, McKinney's 1980 Session Laws of New York, p. 1766). The State's action was designed to keep old and to attract new financial business to the State, thereby producing jobs, income, and tax revenue.

Clearly, the State had two legitimate objectives in enacting the foregoing legislation--on the one hand, to protect the poor and desperate by giving law enforcement authorities a weapon with which to combat the "loanshark", and, on the other, to preserve and expand the State's legitimate financial industry thereby producing jobs and revenue. This Court can not say that to treat this defendant differently...